The Confederation of British Industry has launched a report called Connecting Companies – Using Corporate Venturing for Growth, to highlight the benefits of large companies investing in smaller ventures.
The report comes amid increased interest in design consultancies as acquisition targets for larger media companies.
Published in association with National Westminster Bank and the Department of Trade and Industry, the report gives an insight into corporate venturing, the strategies involved and the potential rewards and risks.
It says 80 per cent of corporate venturing deals are successful, with three out of four companies generating growth as a result.
Financial Secretary to the Treasury Stephen Timms outlines the aims of the report: “We want to make corporate venturing a success in the UK. We are encouraging new dialogue between established companies and new firms and want to turn innovative talent into corporate success.”
But CBI deputy director-general Peter Agar claims tax relief for corporate venturing, outlined by the Chancellor in last week’s pre-Budget report, is insufficient. “Corporate venturing can work and tax relief is an excellent idea that will encourage companies to consider the option. But tax relief is unlikely to be enough.
“We need to ensure that companies both large and small understand the benefits and how to establish partnerships that add value,” Agar explains.